Trading and natural disasters: We are in the midst of one right now!

Market Pulse: May 16, 2011

COT Data

Even the COT report does not help in a natural disaster. Last week commercials were net-short -358,638 contracts, up from -385,009 contracts the week before. See the weekly chart for a view of the new disaggregated report. Within the past month, corn has come down over $1.00 since closing over 780 on April 11. You can see from the daily chart below that even technicals can’t necessarily help at times like this. I highlighted the Japan earthquake so you can see its short-term effect. Also, the Prospective Plantings (not a natural disaster but a major report), and of course what is happening right now with old man river.

Another interesting market to view is the Japanese yen. No doubt you know what happened there, but viewing it on a chart is eye opening. We also had a massive G-7 intervention on behalf of the yen. Looking at the daily chart, below you will find that safe bets would have been shorting on a close below 123 and then taking a long on a close above 120. Both would have worked well, as you can see. In the COT we see commercials swing to a net-long high by April 15 at 76,983 contracts and as of last week are once again net-short at -1,317 contracts.

Keep an eye on cattle as prices have dropped from all-time highs, but currently the southwest, especially Texas, is experiencing a major drought (the opposite of a flood). Last week it was reported that many ranchers are bringing cattle to slaughter earlier because of the lack of water. We could see cold storage figures rise.

Commodity

12-mo low

12-mo hi

13-May

6-May

Cattle (feed)

-1,290

7,100

2,627

1,550

Cattle (live)

-73,179

-13,375

-13,375

-18,229

Hogs

-35,979

836

-7,259

-18,710

Corn

-413,915

119,389

-358,638

-385,009

Oats

-7,738

829

-4,228

-5,275

Soybeans

-203,260

34,246

-82,210

-100,740

Soybean meal

-90,487

-32,915

-42,868

-44,026

Soybean oil

-117,444

32,394

-52,781

-73,710

Wheat

-32,577

74,638

9,911

4,562

Orange juice

-18,285

-6,588

-15,582

-15,524

Coffee

-47,729

-7,801

-31,658

-38,171

Cocoa

-41,808

8,586

-21,526

-23,995

Sugar

-221,694

-104,983

-122,808

-117,337

Cotton

-69,857

-12,970

-33,145

-30,990

British pound

-66,435

97,211

-35,184

-53,460

Canada dollar

-115,190

-13,109

-69,423

-87,598

Euro FX

-124,855

117,253

-79,732

-124,855

Japanese yen

-52,533

76,983

-1,317

31,440

Swiss franc

-42,387

25,677

-33,273

-36,286

US dollar index

-26,838

14,003

1,545

3,900

Mexican Peso

-140,414

-14,488

-124,589

-131,020

Australian dollar

-110,025

-10,793

-74,738

-90,849

S&P 500

-88,893

33,981

-70,170

-73,753

T-note -10 yr

-74,761

253,825

190,521

154,933

T-bond -30 yr

-43,324

88,803

-2,658

15,343

Eurodollar

-1,179,414

105,872

-192,594

-351,771

Crude oil

-319,669

-23,057

-243,171

-283,704

Heating oil

-66,097

7,568

-34,998

-47,882

RBOB Gasoline

-85,987

-10,453

-66,747

-72,331

Natural gas

111,345

228,910

161,629

138,927

Copper

-36,201

1,793

-8,451

-19,795

Gold

-302,740

-193,197

-221,581

-240,102

Platinum

-34,909

-15,759

-28,021

-31,389

Silver

-65,413

-41,336

-41,336

-42,460

Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.

If you need help understanding how to understand how to use the COT report to your benefit, please email me at Gary@crbtrader.com and put COT report in the subject line. Please include your name and telephone number in the email.

Proceed to Page 3 for this week's detailed fundementals charts...

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